Meta under pressure – Part 2: how Instagram lost its way

Kylie Jenner (in our cover photo) has 368 million followers on Instagram – more than any other woman. Her opinion matters. In July, Kylie reposted «Make Instagram Instagram again», joining a chorus of users protesting the direction the platform is taking. Instagram was bought by Meta in 2012. The acquisition is one of the most successful in tech history – and at the same time a cautionary tale. It shows how Mark Zuckerberg deals with competition and how fast-moving the business of likes can be.

But the former crown jewel in Meta’s social media portfolio is currently alienating the people who made Instagram great – influencers. Welcome to part 2 in my series on Meta’s problems: how Instagram lost its way If you missed the part 1, you can find it here:

One billion dollars for 13 employees

When Facebook took over Instagram ten years ago, Mark Zuckerberg was laughed at or declared crazy. He paid a billion dollars for a company with 13 employees that made no profit. Even measured against their 30 million users, the sum was absurdly high. But Zuckerberg was under pressure: Facebook had slept through the move to mobile devices – and Instagram was designed exclusively for smartphones. The app threatened to become a competitor sooner or later.

Zuckerberg spent three days negotiating with Instagram founder Kevin Systrom at his Palo Alto mansion. According to reports, he halved the price from two to one billion dollars. Facebook’s board of directors wasn’t asked – only informed. This is possible because Zuckerberg still holds the majority of voting rights. He is thus untouchable and can determine the course of his giant corporation on his own authority.

In the end, the deal came to be. Aside from the price, Systrom had negotiated something else: a promise from Zuckerberg that the Instagram team would be allowed to continue working autonomously. He had good reasons for this. The cultures of both companies couldn’t have been more different. While Facebook lived by the famous motto «move fast and break things», Instagram was intent on doing just the opposite. Nothing was allowed to touch the simplicity and aesthetic clarity of the app. Any change, no matter how small, was considered a serious decision.

The birth of the influencer

The acquisition was a success. Facebook shovelled financial and human resources into Instagram while its user numbers exploded. The app owed this, among other things, to the rise of a specific user group: influencers. At first, it was traditional celebrities who used the platform to appear more approachable to their fans – Snoop Dogg, Justin Bieber, Selena Gomez. But soon, things went the other way: previously unknown individuals suddenly became famous through Instagram and reached millions of followers with their accounts.

Even away from the stars, Instagram developed into a pop-cultural phenomenon. There was a hashtag for each topic. Communities formed around every niche. I’ve witnessed this development first-hand. All my friends used the platform. If I made an acquaintance while travelling, we exchanged Instagram handles instead of phone numbers. Same story in the professional world: photographers no longer necessarily needed a website – a well-curated Instagram profile with as many followers as possible was enough.

With attention comes money. Being an influencer became a profession, as sponsored posts and product placements could and would earn you a whole lot of money. Conversely, it’s a comparatively inexpensive and efficient way for companies to reach specific target groups. Instagram itself was also making more and more money as the platform was able to tap into Facebook’s already existing advertising system. But this professionalisation was soon to become their biggest problem.

Copy + Paste

In the early days of Instagram, the threshold to post was low. All it took was individual images. No multiple pictures, no long descriptions. With the built-in filters, everything looked hip and special. Over the years this changed, and by 2016 things were different: the Feed was now full of professional content. Perfectly styled users in front of perfect backgrounds in perfect lighting. The bar kept getting higher, and normal users were less and less likely to post anything at all. This was a problem, as fewer posts meant less time in the app. Less time meant less advertising revenue.

A different app didn’t have this problem: on Snapchat, any pictures posted disappear again after 24 hours, «Stories». A like counter as a public measure of popularity? Also missing. The vital user group of teenagers in particular loved Snapchat, turning their backs on Instagram more and more. So Instagram, which practically still looked like it did at launch, did something uncharacteristic: it changed something. More specifically, it copied Snapchat’s idea and even gave the feature the same name: Stories. In just eight months, the number of daily active users of Instagram Stories overtook that of Snapchat.

This copied feature earned Facebook a dubious title: «The Most Chinese Company in Silicon Valley» – alluding to China’s let’s say «liberal» approach to patents. In fact, to this day, one of Mark Zuckerberg’s core strategies is how he deals with competition – buy or copy. Snap and its app still exist today, but it’s struggling with declining revenues. Last year, its share price fell by more than 80 per cent, and last week the company announced a massive 20 per cent job cut.

From photos to videos, from friends to algorithms

Instagram now has nearly 1.5 billion users. Founders Kevin Systrom and Mike Krieger left the company in 2018. Zuckerberg’s promise of autonomy had long since softened, not least when Instagram threatened to cannibalise his own baby, Facebook. Zuckerberg continued adding more and more of his own executives and collecting user data for his advertising machine. The algorithms also changed a lot over the years. Alongside Facebook, the feed evolved from a simple timeline to a mix of particularly popular posts from friends, advertisements, and suggested posts from unfollowed accounts.

Back to the present and Kylie Jenner’s viral «Make Instagram Instagram again» repost. She’s not alone in wishing for her old platform back, the one that made her successful. Photographer and YouTuber Peter McKinnon released a video titled «the end of instagram» two weeks ago. In it, he speaks to fellow photographers who are fed up with the new algorithms and features. «This once platform[sic] which was very community-driven, filled with people that you were interested in, people that you are friends with, things that you’ve chosen to see, is now none of that,» McKinnon says. He isn’t sure if even the programmers themselves know what they’re doing any more. Algorithms are changed, reverted, then changed again.

Instagram has also clearly been absorbed by Meta in terms of its corporate culture – «move fast and break things». New CEO Adam Mosseri has made no secret of their shift in focus from pics to videos. As far back as last year, he made it quite obvious: «We are no longer a photo-sharing app.» Surveys had shown that users mainly want to be entertained. To keep up with competitors such as YouTube in this regard, Instagram needed to change, he said. He struck the same chord with his response to Kylie Jenner’s post: «I do believe that more and more of Instagram is going to become video over time.»

No longer the same app

The result? Posts in your normal Feed have become rarer – even I can see that. My last post was almost half a year ago. At most, I only use the platform as a personal travel diary. I still open the app regularly out of habit, but I don’t scroll any more; at most, I look at the Stories of people I know. If my finger does slide down, at most half of the posts are still ones I want to see.

Instagram isn’t the app it used to be. It isn’t focused on photos any more. Nevertheless, it’s still popular among my generation. If Facebook has become Boomerville, Instagram is evolving into Millenialtown – not uncool yet, but no longer all the rage either. The avant-garde of social media users, teenagers, is migrating to another app. I’ll deal with that platform and its impact on Meta in the next instalment. It’s not from Silicon Valley, but China: TikTok.